Chapter 3:Fundamentals of money by understanding Income statement and Balance sheet/My financial situation (included in this post & Must See !)

Hello again,lets proceed to discussion on fundamentals of money by understanding Income statement and Balance sheet (in short :financial report).Details about what is element of financial report about (Liabilities,Income,Expenses, and Asset).Click Here

The Basic Two

• This is the Cash Flow pattern of an asset

The rich have their assets working for them.Asset is a resource that produce passive income to the Rich in general .

• This is the Cash Flow of a liability

The poor buy liabilities, which do not generate income and take money to maintain. Liabilities are mortgages, consumer loans, credit card debt.

• This is the Cash Flow Pattern of the Middle Class (a level in society in a nation)

Here is another details figure that showing cash flow of Middle Class

Spend it mostly on liabilities and expenses, then you confirm join the middle class.

• For my financial situation,here are Cash flow of Young Peoples /Fresh graduate students

For additional information,i need to pay PTPTN study loan,mom's medication fee,bills and several debts from relatives and friends.

• If possible ,i will do my best to develop this kind of cash flow:The Cash Flow of a Rich

Elements of asset can be properties,bonds,stocks,business and also FOREX.
Asset produces passive income that can be use to pay all debts and balance my financial report forever.
Here is another figure that showing capacity of The Rich's cash flow in term of size of rectangular shape represent by its own function.


Normally,The Rich will reinvest all passive incomes that generated from Asset section(just like a big snow ball bigger and bigger by rolling it!) .At the same time you can use some of it to pay liabilities and expenses until certain level that your money in your pocket is GREATER than you spend out many times!It mean that you are financial freedom liao!!
Another way to achieve it is when you buy a liability (car loan,study loan at which those can be consider as BAD debt),you can establish several investment portfolios just to "pay" for each debts of yourself, it mean that your are totally get your car,your home or undergoes study at any universities for FREE !The Rich get richer~~